§ 781. Borrowing Money
781. Borrowing Money
(a) The guardian may mortgage or pledge any real or personal property of a guardianship estate by deed of trust or otherwise as security for an indebtedness, under court order, when necessary for any of the following purposes:
(1) for the payment of any ad valorem, income, gift, or transfer taxes due from a ward, regardless of whether the taxes are assessed by a state, a political subdivision of the state, the federal government, or a foreign country;
(2) for the payment of any expenses of administration, including sums necessary for the operation of a business, farm, or ranch owned by the estate;
(3) for the payment of any claims allowed and approved, or established by suit, against the ward or the estate of the ward;
(4) to renew and extend a valid, existing lien;
(5) to make improvements or repairs to the real estate of the ward if:
(A) the real estate of the ward is not revenue producing but could be made revenue producing by certain improvements and repairs; or
(B) the revenue from the real estate could be increased by making improvements or repairs to the real estate;
(6) court-authorized borrowing of money that the court finds to be in the best interests of the ward for the purchase of a residence for the ward or a dependent of the ward; and
(7) if the guardianship is kept open after the death of the ward, funeral expenses of the ward and expenses of the ward's last illness.
(a-1) The guardian of the estate may also receive an extension of credit on the ward's behalf that is secured, wholly or partly, by a lien on real property that is the homestead of the ward, under court order, when necessary to:
(1) make improvements or repairs to the homestead; or
(2) pay for education or medical expenses of the ward.
(a-2) Proceeds of a home equity loan described by Subsection (a-1) of this section may be used only for the purposes authorized under Subsection (a-1) of this section and to pay the outstanding balance of the loan.
(b) When it is necessary to borrow money for any of the purposes authorized under Subsection (a) or (a-1) of this section, or to create or extend a lien on property of the estate as security, a sworn application for the authority to borrow money shall be filed with the court, stating fully and in detail the circumstances that the guardian of the estate believes make necessary the granting of the authority. On the filing of an application under this subsection, the clerk shall issue and cause to be posted a citation to all interested persons, stating the nature of the application and requiring the interested persons to appear and show cause why the application should not be granted.
(c) If the court is satisfied by the evidence adduced at the hearing on the application that it is in the interest of the ward or the ward's estate to borrow money under Subsection (b) of this section, or to extend and renew an existing lien, the court shall issue an order to that effect, setting out the terms and conditions of the authority granted. The term of the loan or renewal shall be for the length of time that the court determines to be for the best interests of the ward or the ward's estate. If a new lien is created on the property of a guardianship estate, the court may require that the guardian's general bond be increased, or that an additional bond be given, for the protection of the guardianship estate and its creditors, as for the sale of real property belonging to the estate.